El Paso City Council to negotiate for El Paso Times, 2nd building

Members of City Council take notes while discussing three properties that they are considering as locations where City Hall staff would be moved to in order to demolish the current City Hall location to make room for a new basball park.

The city will begin negotiations to buy two buildings -- the El Paso Times and another a block away on Texas Avenue -- after the City Council on Tuesday voted to move forward with relocating city operations to other Downtown sites.

"El Paso is marching in an ambitious direction, and today we are one step closer to the prosperity that this community deserves," said city Rep. Steve Ortega, who supported the move.

The move is necessary to make room for a $50 million baseball park that's to be built where City Hall and the Insights Science Center now stand. The council in June committed to build the stadium if a private investment group, MountainStar Sports Group, secured a Triple-A baseball team for the city. The group recently received a key approval from Minor League Baseball's Pacific Coast League to buy a team, presumably the Tucson Padres, which are affiliated with the San Diego Padres.

Mayor John Cook, who was not at the June meeting, said Tuesday that he believed the city was "sacrificing a functional building" by demolishing City Hall. Cook, who votes only to break ties among council members, added that he didn't believe splitting the city's functions was good practice.

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Others agreed.

"I think we are making a big mistake," city Rep. Carl Robinson said. "The actions we took on June 26 and the actions we are taking today have done irreparable damage to public trust."

Robinson and city Rep. Eddie Holguin voted against the purchase of both buildings, while Rep. Emma Acosta voted against buying the building on Texas Avenue.

For now, the City Council has abandoned the purchase of the Luther Building owned by Paul Foster, one of the investors in MountainStar Sports, saying it was too costly and may not be needed if the other two buildings are purchased.

City Manager Joyce Wilson said contracts will need to close within 30 to 60 days to meet the tight construction schedules. That would allow city employees and the Insights staff, to clear out of the buildings by February so demolition can begin and allow a full year for construction of the stadium, she added. The city has to have a baseball stadium built by April 2014, when the first season of the yet-to-be-named El Paso team will begin play.

Officials with the city's contracted real estate companies, TVO North America and RJL Real Estate Consultants, on Tuesday presented recommendations on where to relocate nearly 650 city employees. The real estate companies looked at 15 buildings, many of which would not be ready for the city to occupy by February.

Wilson said that though the original plan was to temporarily lease office space, the real estate consultants recommended it would be "more advantageous to buy because ownership gives us equity."

Bricks, mortar and more

The 70,000-square-foot building at 801 Texas Ave., which has an annex listed as 811 Texas Ave., has a list price of about $2.5 million and would require about $7.6 million in renovations. The building is owned by Harl E. Dixon. The building would probably house the City Development Department, where the public can request building permits and the like. The building could also house the Community Development and Parks and Recreation departments, as well as the Engineering Department.

The city's contracted real estate consultants said the 83,000-square-foot El Paso Times building at 300 N. Campbell Street was a "perfect fit," primarily because it would be move-in ready.

John Folmer, a partner with RJL Real Estate Consultants, said the proposal with the Times' parent company, Digital First Media, initially was to lease part of the building. The real estate groups also asked whether the company would consider selling the building and were given an asking price of about $11 million. The newspaper's two-story building was built about 20 years ago and once also housed the El Paso Herald-Post, which closed down in 1997. Most of the second floor is now vacant.

"We were a little flabbergasted," Folmer said, adding that the condition and size of the building, as well as its nearby parking lot and surrounding parking spaces, were ideal for the city's needs. "It was a slam-dunk in terms of being ready."

Officials said that if the purchase goes through, the newspaper will probably move to another building.

"If and when this deal closes with city, we will immediately begin exploring different options in the event we have to move. Should the city pursue a purchase of the Times' building, we will work with the city to ensure we have an appropriate transition period to relocate our operations as needed. In the meantime, we will continue to operate, we will continue to publish, we will continue to serve our communities," said Sergio H. Salinas, president and publisher of the El Paso Times.

The building could then house the city's administration, including the mayor, city representatives and city manager's office, as well as the Budget and Finance departments, among others.

City Council and other public meetings could be held in the city's Main Library Downtown, which has an auditorium with the equipment necessary to run, televise and record the meetings.

The proposed purchase of a third building, the Luther Building, was voted down as city representatives considered the cost too high.

The original recommendation was to buy the 62,400-square-foot building at 218 N. Campbell for no more than $17.4 million, provided that Foster bring it up to code and do extensive renovations and remodeling to the city's specifications.

The city representatives said they also wanted to see whether it would be possible to fit the Information Technology Department into the El Paso Times building instead. Original plans had put the department in the Luther Building.

Time, costs and savings

The two buildings could cost just more than $22 million, officials said, though costs will still be negotiated. The preliminary calculation includes 2 percent for the cost of issuing the debt over 20 to 25 years and 2 percent for the arts program required by the city, according to city documents.

The buildings would be placed under the city's Capital Improvement Program and will be paid for with certificates of obligation, bonds which don't require voter approval but are repaid with taxpayer dollars.

The overall tax impact would be about $5.75 per year on the average $123,000 home, officials said. The increase would probably be incremental starting in 2014.

The cost of financing the buildings would not be included in the tax rate being proposed for the coming 2013 fiscal year -- 66 cents per $100 of valuation, which is the same as the current rate.

The city will also look into buying the El Paso Times parking lot across the street from the building, which may add to the cost.

Officials said buying instead of leasing could also help save money at other facilities where the city rents space, such as the $250,000 yearly lease for the El Paso Fire Department administration.

"If negotiations are not reasonable, then we can cease negotiations," said Wilson, who added that any final contracts will require City Council approval.

In his objection to the proposed purchases, Holguin also questioned whether the petitions by a grass-roots group, Quality of Life Voter for Democracy, were being disqualified or ignored as the city moved forward with its plans.

The issue was discussed in executive session because of potential litigation, including whether the petition might be deemed illegal or frivolous. Officials said the city clerk is still verifying that the petition-signers are registered voters as required by law.

Members of another group, the Coalition for Responsive Government, said that later this week they planned to present a 2,000-signature petition to the city clerk's office opposing the demolition of City Hall.